After reviewing some of the recent EU economic governance reform provisions, the paper discusses three main in-built vulnerabilities of the euro area: the absence of co-responsibility for public debt; the strict prohibition of monetary financing; and the vicious circle represented by the fact that states are individually responsible for rescuing banks in their jurisdictions, but banks are exposed to their own governments through their holding of debt securities – the so-called impossible trinity. The paper argues that although changing the European Central Bank’s mandate and building a banking federation could theoretically be contemplated, the only practical and feasible solution to the euro area crisis is the fiscal union. But the fiscal union still lacks a consensual blueprint and it would entail some form of a political union as well. With United Kingdom and the Czech Republic not agreeing to become parts of the fiscal compact, and a more self-confident but less European Germany, the prospects for such a solution based on euro solidarity and political will for deepening integration are uncertain.